iPad Mini Eating iPad's Lunch

Apple sold 19.5 million iPads during the first quarter of the year, but it didn't provide a break-down of those sales. Apple sells the full-sized iPad and the smaller iPad Mini with $499 and $329 starting prices, respectively. Apple won't tell us which outsold the other. Apple's Asian component suppliers, however, are willing to venture some projections.

Of the 19.5 million iPads shipped, 12.5 million were the iPad Mini, according to supply sources cited by DigiTimes. The iPad Mini accounted for 64% of all iPad shipments during the first quarter, leaving the full-sized iPad with 36% of the iPad pie at shipments of 6 million.

DigiTimes' information lines up with what NPD DisplaySearch predicted back in December. Last last year, DisplaySearch said that Apple misjudged the iPad Mini's popularity and doubled orders for the first quarter of 2013 from 6 million to 12 million.

"It is likely that Apple will adjust its product portfolio to meet the strong demand for the iPad Mini," noted NPD DisplaySearch's David Hsieh at the time.

The iPad Mini doesn't have the iPad's Retina Display, but its smaller profile and significantly lower weight make it easier to hold and carry around. The weight factor alone is huge: the iPad Mini weighs 0.66 pounds, while the iPad weights 1.44 pounds, making it more than twice as heavy. The iPad Mini measures a tight 7.87 by 5.30 by 0.28 inches and the iPad is 9.5 by 7.31 by 0.37 inches.

The other big benefit the iPad Mini has going for it is the price. The entry-level iPad Mini costs $170 less than its bigger brother. Even so, at $329, the iPad Mini is significantly more costly than the $199 Android tablets with which it is competing.

Tablets with seven-inch screens seem to be the tablet sweet spot, offering a screen that's just large enough to supplant a smartphone, but still small enough to make the device portable. Sales of the first-generation Nexus 7 tablet are estimated to be between 4 and 4.5 million since its July 2012 release. Google is widely expected to refresh the Nexus 7 as soon as this month. It will be a worthy competitor for the iPad Mini. HP's low-cost seven-inch tablet reached the market last week. Samsung announced the Galaxy Tab 3, another seven-incher, earlier this week.

The battle lines have been clearly drawn in the struggle to sell small-screen, low-cost tablets.

Of course, Apple isn't ignoring the larger iPad. The next-generation iPad is expected to have a smaller profile and reduced weight, but it won't arrive until the fall.

This really doesn't come as much of a surprise. Last October, BYTE ran an article that cited analysts predicting iPad Mini would cannibalize as many as 1 million current-gen iPad sales during the fourth quarter.

Back then, BYTE's Former Editor Larry Seltzer said "Apple neither makes nor loses money when someone buys a Kindle Fire. But if the [cannibalization] is true, and they're losing iPad 'Biggie' sales then it's a matter of which is more profitable to Apple."

Apple could have stayed the course, put all their focus on making a class-act iPad and truly dominated the market. Instead Apple got greedy and shot themselves in the foot.

But I guess in the end a sale is a sale to Apple...so long as its going to them and not the other guy.

No doubt, a portion of iPad Mini sales are made by those who might otherwise have bought a full-sized iPad. But it's not all bad news. This article makes no mention of those customers who would never have bought an iPad had it not been for the availability of the Mini.

The Mini is no loss leader. Apple still makes a reasonable profit on each one sold, as well as bringing additional people into the Apple fold. And we know that once people get a taste of Apple, they are likely to stay loyal.

I like this analysis. Sad fact is that $200 or even $100 difference in cost is a big deal to many on modest incomes. We'll see the same sort of split if and when Apple comes out with the rumored lower-cost iPhone.

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